The Case for Insuring Illegal Immigrants

I've pretty much given up on attempting to fight xenophobia with wonkery, but just for fun, here's Newsweek's Andrew Romano arguing that the problem isn't that health-care reform won't include illegal immigrants. It's that it doesn't, and it should:

According to a July article in the American Journal of Public Health, immigrants typically arrive in America during their prime working years and tend to be younger and healthier than the rest of the U.S. population. As a result, health-care expenditures for the average immigrant are 55 percent lower than for a native-born American citizen with similar characteristics. With the ratio of seniors to workers projected to increase by 67 percent between 2010 and 2030, it stands to reason that including the relatively healthy, relatively employable and largely uninsured illegal population in some sort of universal health-care system would be a boon rather than a burden. "Insurance in principle has to cover the average medical cost of all the people it's serving," explains Leighton Ku, a professor of health policy at George Washington University. "So if you add cheaper people to the pool, like immigrants, you reduce the average cost." More undocumented workers, in other words, means lower premiums for everyone.

The actuarial advantages don't end there. As it is now, undocumented workers (and others) who can't pay their way receive free emergency and charitable care — a service that costs those of us with health insurance an additional $1,000 per year, as Obama noted. But if illegal immigrants were covered, this hidden tax would decrease, further lowering our premiums and "relieving some of the financial burden on state and local governments," says Harold Pollack, a University of Chicago professor who specializes in poverty and public health.

What's more, employers currently have a clear economic incentive to hire undocumented immigrants: They don't require coverage. A plan that mandates insurance for native workers but not their illegal counterparts actually makes life harder on the blue-collar Americans competing for jobs (and railing against immigrants) because it means that hiring them will cost more than hiring a recent transplant from Mexico City.

Romano quotes me making this point later in the article, but if you're worried about the wages and competitiveness of the native-born workforce, what you want to do is make it more expensive to hire illegal immigrants. One way to do that is to force employers to cover their health-care costs. As it is, employers will now be forced to cover at least part of their workforce's health-care cost — unless they hire illegal immigrants!

And that doesn't even get into the questions of contagion and illness. Illegal immigrants are clustered in service sector and food sector jobs. They clean buildings, prepare boneless chicken breasts, wash dishes, pick food, and generally do jobs that are much more conducive to spreading germs than, say, blogging is. I don't know exactly why Rep. Joe Wilson and Lou Dobbs and all the others in their cohort want to make it more expensive to hire American workers and make it more likely that Americans get sick, but that's why I'm not a political strategist, I guess.

So, Mr. Klein, if undocumented immigrants are "covered" how exactly would the costs go down?

Right now the emergency health care costs of illegals aliens is paid for by taxpayers.

But "undocumented immigrants" don't pay taxes. So even if you wave the magic wand and say they are covered by the public plan or whatever, their health care would. . .still . . .be . . .paid. . .by . . .taxpayers. I fail to see how this proposal would lessen the cost to anyone except the illegals. The only way to do that would be to extract some form of taxes from illegals. Ah, but remember these folks are "undocumented," so good luck trying to get them to pay taxes, since the feds don't even know they exist! Once again an example of how Democrats live in a fantasy theoretical world that bears little to no resemblance to the actual planet earth.

The claimed upside of actually verifying citizenship at the hospital is that it makes it easier to arrest and deport criminal aliens. The other half of the equation is catching the criminal citizens who use criminal aliens as labor... and the solution for that problem has been more elusive.

Once more of the unskilled positions now filled by criminal aliens are freed, more citizens can be placed in them, making welfare-to-work a bit easier to implement.

Wow this is a ridiculous post. So if an employer doesn't offer its illegal immigrants healthcare you think that the workers should sue? You think that someone who already has no problem hiring a worker illegally would have a problem with not giving that illegal worker the healthcare you want to be mandatory?

Actually, octopi213, undocumented workers pay something like $9 billion a year in taxes (I think that's mostly payroll taxes -- i.e., SS and Medicare). It's a windfall for the system, because they don't get to draw on SS and Medicare themselves.

Putting that aside, Ezra's point is that if they were included in the health care system, they would have to pay premiums like everyone else and would end up financially supporting others. And, of course, there are the public health implications. (Airborne viruses and food-borne pathogens don't check papers.)

The cost argument is actually one of the simpler pieces of health reform. ER costs for anyone, illegal or otherwise, when put against primary care can be anywhere between 3:1 - 10:1.

It is entirely within the realm of possibility that having every illegal alien get primary care instead of ER care when appropriate would, in fact, save taxpayers money. Seriously.

Of course, that position assumes that we all believe it ethically appropriate to provide everyone with emergency care, irrespective of citizenship. Can't help but wonder if there isn't a tacit desire to amend EMTALA to 'let them bleed to death in the streets' from the Lou/Wilson fanbase.

"Rep. Joe Wilson and Lou Dobbs and all the others in their cohort...."

Note that Barack Obama is in this cohort.

Politically, the exclusion of undocumented immigrants is about as broadly bipartisan as one can imagine. I can't think of a single prominent Democratic politician who has called for coverage of undocumenteds.

I might believe that $9 Billion number if you provided some kind of source to back that up. Otherwise, I can make up meaningless numbers too.

And then that doesn't begin to get into the nature of what taxes do they pay? How much of that supposed (probably inflated) $9 Billion goes to federal income taxes and SS/Medicare? This matters, because if it is simply state/local sales taxes, it would do nothing to stem the cost of the federal benefits that they receive.

Further, just doing a little math here using again the probably inflated $9 Billion: 9 Billion / 20 million illegals = $450 per illegal per year. Consider that I pay that much in taxes in about two weeks and I am right at the median income for this country, give or take a few hundred $. Is that what we call, "paying their fair share?"

If the feds can't enforce current tax law on illegals, how are they going to be able to force them to pay their health insurance premiums? Not to mention these premiums would be heavily subsidized, since they clearly get away with not reporting most of their income and would apply for extra breaks in their premiums.

If his argument is that he want to insure illegals because it gives him a warm fuzzy feeling, then fine that's his argument. But in this post he insinuates that covering illegals would somehow keep costs down, yet provides zero evidence to back that up. And this is probably because this argument is just wrong and defies logic.

As for the diseases issue, maybe if the feds and illegal "haven" states (I'm looking at you, Maryland), had actually enforced immigration law over the past 20 years or so, this wouldn't be a big issue.

re tomtildrum: "I can't think of a single prominent Democratic politician who has called for coverage of undocumenteds."

I agree. It's too politically risky for any politician to tell the truth of how it would be much better economically to include illegal immigrants in the risk pool for health insurance. Instead, we end of with the possibility that US citizens will be required to purchase health insurance or pay a penalty, while illegal immigrants won't face the same burden. I guess it's just another case of American exceptionalism.

Why don't you get in line for a brain. Don't you think illegal immigrants are paying taxes when they go shopping, buy alcohol or tobacco, put gas in their vehicles. Or would you prefer that politicians relieve them of that duty, too.

Looks like it is you who is on the waiting list for a brain. Those taxes that you listed that illegals pay do not pay for the health services that they draw from the health care system. It is well known that the term "taxpayer" refers to those who pay federal income taxes, social security and medicare taxes, state income taxes, etc. These are the taxes that pay for the social services that are being proposed in Congress. And when you receive that replacement brain you request, you might want to make sure it hasn't already been lobotomized like the one you currently have.

you forgot to factor in the $1000 in hidden tax we all pay for illegals healthcare in that $450 that they pay per year in Janine1's example.

Also when we can't control our borders now does the Federal government expect us to believe that once we give the current illegals in this country (who we don't know who or where they are at any one point in time) that we'll be able to account for them all then. DO we really expect them all to come out from the shadows?

What do we tell all the legal immigrants who have been waiting patiently to become American citizens? Sorry you got bumped?

In theory Ezra's post works perfectly. The problem is we all don't live in theory.

Who benefits from the payroll taxes of illegal immigrants? Or do you think that all of these people are being paid in cash. Maybe the Mitt Romneys in this country pay their gardeners cash, but corporations issue paychecks. Nice of you to piss on taxes they pay for everyday goods. I bet you're part of that contingent who would vote to "let them bleed to death" in the emergency rooms.

Octopi213, still not sure what your argument is. Are you saying that illegal immigrants would sign up for health insurance, then never pay their bills while the insurance company keeps them on the rolls for free? It doesn't make much sense. The argument here is that it's cost effective to have illegal immigrants paying into the system to both shift resources out of emergency care and to broaden the risk pool for insurance.

"if we were to put EMTALA to a popular vote right now, there would be a solid 20 to 30% vote for the "let them bleed to death" position..."

Not just for illegal immigrants, either. Remember the Ponnuru article some time ago that argued that all health insurance should be voluntary. If such insurance is voluntary, then it follows that we should not pay for emergency care for those who choose not to carry insurance (otherwise, we'd just be creating more moral hazard incentives).

Ponnuru never confirmed whether he was for letting the uninsured bleed to death, but it's inherent in the policy position that all health insurance should be voluntary, which is (as I understand it) the position of the entire Republican party.

Fair enough, octopi213, I was pulling from memory something I read during the immigration debate last year. But here's what I found in 30 seconds on Google:

"The presence of unauthorized (undocumented) workers in the United States also has a positive effect on the financial status of Social Security. The earnings of unauthorized workers are less likely to be reported for tax purposes than the earnings of the rest of the population and even less likely to result in future benefits, according to Social Security’s chief actuary. Although the magnitudes cannot be precisely determined, the actuary has estimated that unauthorized immigrants paid as much as $13 billion in Social Security payroll taxes in 2007. About $1 billion in benefit payments were made based on unauthorized work (for example, survivor benefits paid to U.S. citizens who were dependents of deceased individuals who had made payments into the Social Security system while performing unauthorized work). Thus, undocumented immigrants improved Social Security’s cash flow by an estimated $12 billion in 2007.[9]"

http://www.cbpp.org/cms/index.cfm?fa=view&id=1272
(from the Center on Budget and Policy Priorities, 11/20/08)

Similarly, a NY Times article in 4/05 put it at about $7b/yr.
http://www.nytimes.com/2005/04/05/business/05immigration.html

actuarily you could never win this battle. Sure there is a human element to this discussion and we should care for all but you cannot say that illegal immigrants that pay for taxes through their purchases and those that actually do pay taxes through their employers make up for their expense. If you want to try to make that argument you need to factor in the $1000 and also give some type of (no pun intended) weight to the attached article from the WAPO's Lenny Bernstein.

Sure many of those hispanics there are legal citizens and I don't know that you can seperate out the illegals from the legal citizens in the CDC's reports but hispanics, studies show, a much higher incidence for obesity, the leading cause of diabetes, heart attack etc. Not nearly as high as African Americans, but greater than Caucasians. But again if this is even suggested nowadays the persons suggesting this are painted as racists.

All in all that study is very scary and is a leading cause of why healthcare in the US is greater than any other industrialized nation but it doesn't get nearly enough press.

You're better off sticking to the argument that its the "humane thing to do".

"Undocumented immigrants working 'on the books' pay an additional $114 million to$137 million in Social Security and Medicare taxes. Their employers match thiscontribution and pay an additional $4 million to $5 million in unemployment insurancetaxes on their behalf."

You don't seem to understand the word "undocumented." These people don't have SSNs, don't file tax returns, don't have taxes witheld. Most illegals probably don't work for large corporations because those places actually check immigration status. It is well known that a large % of illegals work in agricultural jobs and are paid under-the-table, thus no income taxes. Have a nice life.

etdean1,

My point is that there is no way to enforce this. How are these people going to sign up for health insurance if they don't have a real, legal form of ID? Are we going to assume they will voluntarily fork over the premiums? What happens to them if they don't pay? They will still be treated.

The other point is that the premiums would be heavily subsidized because most of these people have little to no reported income, since the Democrats would make the premiums "progressive" so those with less income pay less, regardless of consumption of health services. They would then use more services because they now have insurance, so whatever money they pay for their premiums (which will be peanuts) will be outweighed by the increase in the use of services.

This whole idea is one of those things that sounds good in theory, but actually is completely stupid when you start examining the realities of the situation. But then again, Democrats like our friend goadri never excelled at understanding reality.

I know you want to do the right thing but you can't win this argument. You're already $8 Billion in the hole as far as illegals putting into the system (20 billion minus $12 billion) and you're not factoring in also the "services" that illegals get that we all pay for through regular taxes (public schools, fire, police, etc. and i'm sure i'm missing some services as well).

Maybe its not quite as bad as some put it, but its still a negative figure and there's no way around that.

And I never said that they are necessarily "paying their fair share." In some ways, they are paying less, if they don't pay income taxes. In other ways, they are paying more, as when they pay for SS and Medicare from which they cannot benefit.

But you said they "don't pay taxes." You didn't qualify that. And you were unequivocally, demonstrably wrong. (As are conservatives whenever they say that many of the (totally legal, U.S.-born) working poor "don't pay taxes" -- meaning only income taxes, never payroll, let alone sales.)

fair enough. How do you get past the point that we're making an exception for people who did something illegal? How is it fair that they "jump the line" for all the legal immigrants that want to come to the US? Is this not teaching the next wave of illegal immigrants that just wait some time and eventually we'll have another legalization phase similar to what many expect to happen in 2010?

Seems like that is a difficult number for them to pin down, if one source says a number half that of another. Also, $7B is only about 1% of the social security budget for FY10.

The Congressional Budget Office concluded in December 2007 that illegal immigrants are indeed a net drain at all 3 levels of government; local, state, federeal. It was short on dollar figures, but used 30 or more reports in its analysis.

http://www.cbo.gov/ftpdocs/87xx/doc8711/12-6-Immigration.pdf

We could probably do this all day each finding stories/studies that show how much or little illegals cost.

I'm not trying to take a position on the immigration debate here (especially since I have actual work to do that isn't at all related to this). Questions of citizenship, amnesty, and the like are incredibly complicated, to be sure.

But I do think that bending over backwards to exclude undocumented workers from health insurance reform is counterproductive in terms of public health as well as cost (as long as we as a society hold that ERs have to treat the people who come to them, rather than dump them on the curb); that imposing draconian documentation requirements to receive care would waste resources and end up harming actual citizens too; and that having younger, healthier immigrants paying insurance premiums would benefit everyone. I don't see how this is about "jumping the line" (which I think goes to the separate issue of citizenship).

And I had to refute the incorrect claim that illegal immigrants don't pay taxes. Let's have a policy debate, but let's make sure we have our facts straight in doing so.

I agree with you 100%. they do pay taxes but not nearly what they use in "services". That being said I'd always want to treat the patient in the ER under EMTALA which is a very good law and can never be repealed, IMO. But once they're treated, they should be deported. The only thing done before their deportation should be a requirement that they notify INS who their employer is so that they can be severely fined and potentially lose their ability to do what they do. that's the only way (IMO) to slow down illegal immigration. YOu need to cut it from both ends, employer and employee.

Octopi213, I get your argument that the lack of documentation can make enforcement difficult, in a general theoretical sense, but I disagree that it applies in this context. You're right that illegal immigrants (and everyone else) can get free care already, but that's from emergency rooms. Emergency rooms are really expensive. People have to voluntarily fork over premiums if they buy an insurance plan, the same as buying home insurance, or a car, or a tv, etc. And in this case, the lack of paperwork may even work against the ability of the illegal immigrant to obtain subsidies, since that person would lack a complete tax form. Moreover, as I read the research, even if a tax form were faked and the illegal immigrant would receive a subsidy, the net cost impact to the healthcare system overall would be a slight positive. I think the key here is comparing the reform to the status quo. Currently, illegal aliens are getting expensive medical care that's not particularly effective with the bill being spread across the rest of the system. A hypothetical plan that would bring them into the system would remedy that problem and save money.

It's not nitpicking when one reported number is half of the other number. Those are quite large discrepancies that suggest we really don't know how much illegals pay into Social Security.

I'm not admitting an overstatement because there was none. The proper name for Social Security is "Old Age Survivor and Disability Insurance," so it's not technically a tax.

But the main point is that Social Security funds do not pay for the government services that the illegals consume, i.e. schools, health care, police resources, etc. It is federal income taxes and a range of state taxes that pay for these services, and no, the illegals do not pay more than a negligible amount of those taxes.

So we agree that illegals are already getting expensive emergency care that that is virtually free. But if they then have insurance they will consume even more health services because doctors, dentists, etc. will be free or very cheap for them to use. Thus the costs would increase, because the hevily subsidized premiums that they would pay would be dwarfed by the services they would then be consuming and thus be funded even more by taxpayers.

As usual the opponents of any kind of restriction on the illegal immigration, is playing the race card? It's a forgone conclusion that the benefactors of promoting a mass invasion of our shores, such as religious groups, unions, ACLU, radical ethnic caucuses and even our own US Chamber of Commerce, will mouth epithets that doesn't benefit big business that doesn't advocate a continuous force of illegal cheap labor. Now they are really livid because their objection to E-Verify was thrown out of court. Now all federal contractors and subcontractors must adhere to the law. They have conspired against the American worker and people for too long, and now we are fighting back ourselves against corrupt politicians and other elected officials nationwide,

Rep.Joe Wilson was actually telling the truth at the time, and now Democrats have placed restrictive language in the Health care reform package as a reluctant afterthought by public demand. This was nothing to do about bigotry or racism, but the American workers and family survival. None of the business community who hire them wants their labor, but forces the taxpayer to carry the financial load. The US labor force should not have to be in competition, with people from other countries. Businesses have already offshore American jobs, because it's cheaper? So every illegal foreign national and family member should be exempt from government run health care, jobs and all the billions of taxpayer dollars secretly allocated to pay for their support. Twenty million plus illegal people compromised themselves, when they entered a sovereign nation without permission. Find out the truth at NUMBERSUSA, JUDICIAL WATCH and contact your politician at 202-224-3121 demanding no weakening conditions to E-Verify or any other law authored by Congress.